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Nifty Outlook

Markets traded volatile and ended with a cut of nearly half a percent, taking a breather after the recent up move. Favorable global cues led to a firm start but profit taking at the higher levels trimmed all the gains in no time and pushed the benchmark lower. Though buying in IT and FMCG trimmed losses in the middle, the pressure in the IT pack capped the upside. Finally, the Nifty ended lower by 0.4% to close at 17,003 levels. The broader markets too ended with losses in the range of 0.5-1%.

Markets are closely eyeing the COVID situation and any positive news could only help the index to make any sustainable up move else volatility will continue. Interestingly, we’re seeing a mixed trend across sectors so traders should focus on IT, select FMCG, pharma for long trades while the banking pack may continue to trade subdued.

News

* Apollo Micro Systems announced that it has bagged orders worth Rs 5.72cr from DRDO. The company has installed CCTV based security surveillance and animal monitoring systems at Nehru Zoological park, Hyderabad.

* PSP Projects announced that it has divested its 100% stake in PSP Projects INC, a wholly owned subsidiary company.

* Bajaj Consumer Care announced that it has launched a new product ‘Bajaj Sarso Arnio Oil’ in the hair care segment in the domestic market.

Derivative Ideas

TECHM gained 2.38% and closed at 1723.8 on 24th Dec. IT Sector has been outperforming the benchmark for quite some time now . We expect the same to continue. Fresh Longs is being seen in TECHM Fut. We recommend to go Long in TECHM.

Strategy:- BUY TECHM @ 1710-1715, SLOSS AT 1680, TRGT 1775.

Investment Pick - Kansai Nerolac Ltd.

Kansai Nerolac Paints Ltd (KNPL) posted mixed numbers for Q2FY22. Its revenue grew by 17.1% YoY to Rs 1,619.6cr, while its EBITDA and PAT witnessed de-growth of 39% YoY and 48% YoY. Demand from decorative was steady while lower demand from the industrial segment impacted the performance.

KNPL is one of the leaders in the industrial paint segment wherein it garners 40-45% revenue from the industrial segment while remaining from decorative. Going ahead, the company’s strategy is to innovate products in both its segments, expand reach, and focus on product mix as well as gain market share from unorganized segments. Besides, focus to remain on managing cost and operating efficiency which will help in margin growth. Over the medium to long term, we have a positive view on the stock and have maintained a buy with a target price of Rs 705.

Buy - Kansai Nerolac Ltd. @ CMP :-  575.8 Recommendation Price 605 Target 705 Duration 9-12 Months.

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